Australia Is Not LIke U.S.

Popular Economics Weekly

“Australia is not like the U.S.” said commentator Michael Pascoe in the  Sydney Morning Herald in response to President Obama’s remarks on the Umpqua Community College killings by a deranged killer, whose mother kept at least 7 guns at home, in addition to the  8 guns plus ammunition carried by the shooter in the slaughter of college students and a teacher.

"We know that other countries in response to one mass shooting have managed to craft laws that almost eliminate mass shootings," said President Obama. "Friends of ours, allies of ours, Great Britain, Australia, countries like ours.”

We happened to be in Australia while this happened, where the minimum wage for full-time, working adults is more than $16Aus per hour and Australian’s have created a health care system that pays for all normal health care costs (as opposed to catastrophic events), though hospital care is free for every Australian citizen.

In fact, the US now has a gun homicide rate 370 times that of Australia's. “Unlike the US,” said Pascoe, “we collectively decided to have a decent social safety net, the concept of a living wage and make good education freely available. Most of us are wary of those with extreme views of any kind.”

Our gun problem of course extends beyond mass violence, says the LA Times. In 2014 alone, for example, the Centers for Disease Control and Prevention recorded 11,208 people shot to death, 33,636 injured by gunfire and 21,175 who killed themselves with a gun. That's a total of 66,019 people who were killed or injured by a gun, which comes out to 1,269 per week, 180 a day or 7.5 per hour.

Current Australian gun laws were passed after 35 were killed and 23 wounded in 1996.  There hasn’t been a mass shooting in Australia since. At the heart of the new laws was a massive buyback of more than 600,000 semi-automatic shotguns and rifles, or about one-fifth of all firearms in circulation in Australia. The country’s new gun laws prohibited private sales, required that all weapons be individually registered to their owners, and required that gun buyers present a “genuine reason” for needing each weapon at the time of the purchase, as well as a 28-day waiting period while backgrounds were checked. (Self-defense did not count.) In the wake of the tragedy, polls showed public support for these measures at upwards of 90 percent.

“The US is too immature a society to be allowed to play with guns,” said Pasco. “It has never shed its Wild West mythology. Americans still use their courts to kill people, which sends a message in its own way.”

What would cause the mother of the Umpqua college killer to have what can only be called a fanatical devotion to guns?   "I keep all my mags full. I keep two full mags in my Glock case. And the ARs & AKs all have loaded mags. No one will be 'dropping' by my house uninvited without (acknowledgment)," the mother, wrote in her Tweety Bird tweet several years earlier, according to a CNN account.

It has been known for years by those who research gun violence that more gun killings occur in households owning guns. A new survey in the Annals of Internal Medicine narrows down some of the causal relationship between guns and death by finding conclusively that having a gun in your home makes you more likely to successfully attempt suicide. The authors of the survey also found with a lesser degree of certainty that people with guns in their home are more likely to be the victims of a homicide.

According to data gleaned from State and Justice departments for the period between 2001-2011, there have, in fact, been many, many more Americans killed by gun violence than by terrorism. During that 10-year period, some 130,347 have lost their lives to gun violence, compared to the approximately 3,000 Americans killed in acts of terrorism.

“It's all fodder for the deranged fanatics of the American gun lobby, with a bible in one hand and an assault rifle in the other”, concludes Pascoe. “It's fuel for the paranoid interpretation of a line in the constitution that is a blatant anachronism.”
            We have to be a very sick society to have allowed this to happen.  We are so good at preventing foreign terrorists from attacking us, but not protecting Americans from domestic terrorists.  Then we should understand that gun violence itself is an act of terror.  And those that support unrestricted use and purchase of guns are the sponsors of domestic terrorism.

Harlan Green © 2015

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

What Happens in 2016?

Popular Economics Weekly

        

With interest rates rising, what can happen in 2016 to economic growth, which mainly depends on employment and consumer spending? An early sign of continued growth is the Conference Board’s Index of Leading Economic Indicators (LEI) for November, with 8 of the 10 leading indicators that help to predict jobs, housing trends (via permits), interest rates, and stock market movements staying positive.

One LEI indicator, the so-called yield curve spread, focuses on the interest rate spread between short and the 10-year Treasury yield.  The spread is narrowest (even negative, so when short term rates are higher than long term interest rates) during recessions, per the Marketwatch graph, as in 2001 and 2008.  The yield curve spread is currently a healthy 2 percent, with the 10-year yield currently at 2.25 percent, indicating good growth.

 

Graph:  Marketwatch

Wages and salaries that make up some 80 percent of personal income are rising, but much of it is being saved or used to pay down debt.  Still, however, the year-on-year gain for this component, as seen on the Econoday graph, has been moderating to plus 4.5 percent for the lowest reading since March. Nevertheless, growth is still respectable and is being combined with strong savings, which is the light line in the graph. This rate came in at 5.5 percent in November which outside of October's 5.6 percent is the strongest rate in three years.

 

Graph: Econoday

That means jobs are available, gas prices are low, and consumers are building up their bank accounts. The spending side of the report isn’t so strong, however, up a respectable looking 0.3 percent for the month that includes Black Friday — but compared with no change in October. November's year-on-year rate was only plus 2.9 percent, which along with October's 2.9 percent are the weakest showings for spending since January last year.

But consumer sentiment is on the rise going into the final shopping days of Christmas, according to the U. of Michigan Sentiment Survey, up 8/10s from the December flash to a higher-than-expected final December reading of 92.6. The implied level in the final half of the report is in the mid-93 area which would be the strongest pace since way back in June. And in a sign of specific strength for December, the current conditions component is up 1.1 points from mid-month to 108.1 which is nearly 4 points over November.

            So most signs point to a very robust holiday spending season, which should help early 2016 growth.  First quarter growth in the past 2 years was slowed by the severe winters, but the west coast El Nino phenomena has already kicked in, with signs of a much warmer eastern and southern U.S.

             In fact, year-on-year retail sales show non-store, online retailers out in front, at plus 7.3 percent. Restaurants are right behind at plus 6.5 percent year-on-year followed by furniture and by sporting goods, both at plus 5.4 percent. Altogether, core retail sales are up a moderate 3.6 percent year-on-year, but the plunge of 19.9 percent in gas prices is making everything cheaper, with Regular gas prices as low as $2 per gallon in many parts of the country.

Harlan Green © 2015

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen